Ramon Rodriquez has just signed a $8 million contract. The contract calls for a payment of $1 million today, $1.5 million one year from now, $2.5 million two years from now, and $3.0 million three years from today. What is this contract really worth if Ramon can earn 10.5 percent on his money?
The Purple Pillow is a local hotel. This establishment spent $20,500,000 to create the current facility. They borrowed 75 percent of the cost at 6.626 percent interest for 15 years. What is the amount of each monthly payment?
The Boston Clothing Co. has a $1,000 face value bond outstanding with a market price of $1,058.89. The bond pays interest annually, matures in 12 years, and has a yield to maturity of 8.21 percent. What is the current yield? (new concept)
Angelina just deposited $15,000 into an account at The Compound Bank. The bank will pay 4.5 percent interest compounded annually on this money. How much interest on interest will Angelina earn over the next 10 years?
The Fisher Effect discusses what relationships? (What do the relationships tell us?)
What is the Formula for those relationships?
What is the difference between the Annual Percentage Rate (APR) and the Effective Annual Rate (EAR)?
What is the formula for the EAR?